You are on page 1of 29

*117 

Chocosuisse Union des Fabricants Suisse de Chocolat and Others v


Cadbury Limited
In the High Court of Justice - Chancery Division
29 October 1997
[1998] R.P.C. 117
Before: Mr Justice Laddie
October 6–13, 29, 1997
Passing off – Reputation in geographical name – Swiss chocolate – Whether
specificity of reputation is required – Evidence of reputation – Witness collection
exercise for evidence of confusion – Substantial number confused – Damage
inferred – Whether unclean hands.
The first plaintiff was the association for the Swiss chocolate industry. The second
and third plaintiffs were well known manufacturers of chocolate confectionery, and
were members of the association. The second and third plaintiffs produced some
chocolate within Switzerland, and some outside of Switzerland. Only the former
chocolate was labelled “Swiss chocolate”, the latter merely bearing the name of the
producer. The defendant was the leading manufacturer of chocolate confectionery in
the United Kingdom and had been in the chocolate business for over 100 years. The
defendant released a chocolate confectionery product into the market called “Swiss
Chalet”, with the packaging showing the snow-capped Matterhorn mountain and a
chalet. “Swiss Chalet” was made in England. The plaintiffs brought an action alleging
that the defendant had passed off “Swiss Chalet” as “Swiss chocolate”.
The plaintiffs adduced evidence from members of the public and from members of
the trade that the words “Swiss chocolate” were more than simply descriptive of
chocolate from Switzerland. The plaintiffs contended that the class of products
entitled to be called “Swiss chocolate” should be defined narrowly and contended
that the meaning was narrower than “chocolate made in Switzerland in accordance
with Swiss food regulations”. The defendant contended that the class of products to
which “Swiss chocolate” could be applied was so nebulous as to be meaningless,
and relied on the diversity of opinions expressed by members of the public about the
characteristics of “Swiss chocolate”.
The plaintiffs conducted small surveys as witness collection exercises, and
presented some of the participants as witnesses of confusion. The defendant
conducted a similar witness collection exercise in Birmingham, and adduced expert
evidence criticising the methodology of the plaintiffs' survey. It was not suggested
that any of the surveys were statistically reliable.
*118
The defendant contended that none of Lord Fraser's five criteria in Advocaat were
satisfied and that the plaintiffs were barred from equitable relief due to unclean
hands. Two points were taken: (1) the plaintiffs had failed to take all reasonable
steps to educate the English public that “Swiss chocolate” meant chocolate made in
Switzerland: (2) the plaintiffs had mislead the English public into believing that
chocolate made by them outside Switzerland was in fact made there. The plaintiffs
argued that the action should only fail if it would be unconscionable to grant the relief
sought.
The defendant reserved the right to dispute the locus of the first plaintiff to sue,
should the matter arise in a higher court.
Held, upholding the claim for passing off:
(1) For the extended form of passing off of a descriptive term it was sufficient that a
reasonably identifiable group of products had a perceived distinctive quality, even if a
competing product (outside the group of products entitled to use the descriptive
term) was indistinguishable in quality and ingredients (page 128 ).
IRC v. Muller [1901] A.C. 217 ; Bollinger v. Costa Brava Wine Co. Ltd [1960] R.P.C.
16 ; Erven Warnink BV v. J. Townend & Sons (Hull) Limited [1980] R.P.C. 31
referred to .
(2) Although “Swiss chocolate” was descriptive of chocolate made in Switzerland, to
a significant part of the public it denoted a group of products of distinctive reputation.
The fact that the public had different views of what the features comprising the
distinctive quality were was of little relevance (page 136 ).
(3) The class of products entitled to use the term “Swiss chocolate” was chocolate
made in Switzerland in accordance with the Swiss food regulations. What was
required was to identify the class of goods which had built up and were entitled to
exploit the goodwill, not whether the public appreciated the identifying characteristics
of the class (pages 135, 136 ).
Bollinger v. Costa Brava Wine Co. Ltd [1960] R.P.C. 16 ; Erven Warnink BV v. J.
Townend & Sons (Hull) Limited [1980] R.P.C. 31 ; John Walker & Sons Ltd v. Henry
Ost & Co. Ltd [1970] R.P.C. 489 ; Taittinger SA v. Allbev Ltd [1993] F.S.R. 641 ; Vine
Products Ltd v. Mackenzie & Co. Ltd [1969] R.P.C. 1 referred to .
(4) A substantial number of members of the public who regarded Swiss chocolate as
the name for a group of products of repute would be confused into thinking that
Swiss Chalet was a member of that group by reason of the use of the name Swiss
Chalet. It was likely that the number whose were so confused was smaller that the
number for whom there was no confusion, but the number confused was still likely to
have been a substantial number (pages 137, 143 ).
Neutrogena Corp. v. Golden Ltd [1996] R.P.C. 473 followed :.
(5) Since there was a likelihood of confusion amongst a substantial number of
members of the public it followed that the exclusivity of the designation *119 “Swiss
chocolate” would suffer thereby causing damage to the plaintiffs. Such damage
would be insidious (page 143 ).
CIVC v. Wineworths [1991] 2 N.Z.L.R. 432, [1992] 2 N.Z.L.R 327 ; Erven Warnink
BV v. J. Townend & Sons (Hull) Limited [1980] R.P.C. 31 ;Taittinger SA v. Allbev Ltd
[1993] F.S.R. 641 referred to . Harrods Ltd. v. Harrodian School Ltd [1996] R.P.C.
697 explained .
(6) Even if the defendant had established that the plaintiffs had failed to take all
reasonable steps to educate the English public that “Swiss chocolate” meant
chocolate made in Switzerland, this was of little relevance. What mattered was
whether or not the words sued on had a protectable meaning on which the plaintiffs
could rely (page 144 ).
(7) The fact that some people may have thought that chocolate made outside
Switzerland by two of the plaintiffs was chocolate from Switzerland did not render the
plaintiffs' passing off action unconscionable (pages 147, 148 ).
Habib Bank Ltd v. Habib Bank AG Zurich [1982] R.P.C. 1applied . Erven Warnink BV
v. J. Townend & Sons (Hull) Limited [1980] R.P.C. 31 ; Ford v. Foster (1871–1872) 7
Ch. App., 611 ; Newman v. Pinto (1887) 4 R.P.C. 508 ; White Horse Distillers Ltd v.
Gregson Associates [1984] R.P.C. 61 considered .
(8) Here the second and third plaintiffs sued in a representative capacity. Because
the injunctive relief was sought to protect the common interest in the designation
Swiss chocolate, the defence of unclean hands could succeed only if it had been
proved that all or substantially all of the persons with the common interest had acted
unconscionably (pages 148-149 ).
The following cases were referred to in the judgement:

 Bollinger v. Costa Brava Wine Co. Ltd [1960] R.P.C. 16  .


 CIVC v. Wineworths [1991] 2 N.Z.L.R. 432; [1992] 2 N.Z.L.R. 327, C.A.
 Consorzio Del Prosciutto Di Parma v. Marks & Spencer Plc [1991] R.P.C.
351 .
 Dent v. Turpin (1861) 2 J. & H. 139 .
 Ford v. Foster (1871–1872) 7 Ch. App. 611 .
 Habib Bank Ltd v. Habib Bank AG Zurich [1982] R.P.C. 1  .
 Harrods Ltd v. Harrodian School Ltd [1996] R.P.C. 697  .
 IRC v. Muller [1901] A.C. 217 .
 John Walker & Sons Ltd v. Henry Ost & Co. Ltd [1970] R.P.C. 489  .

*120

 Neutrogena Corp. v. Golden Ltd [1996] R.P.C. 473  .


 Newman v. Pinto (1887) 4 R.P.C. 508 .
 Perry v. Truefitt (1842) 6 Beav. 66, 49 R.P.C. 749 .
 Southorn v. Reynolds (1865) 12 L.T. (N.S.) 75 .
 Spalding v. Gamage (1915) 32 R.P.C. 273 .
 Taittinger SA v. Allbev Ltd [1993] F.S.R. 641  .
 Vine Products Ltd v. Mackenzie & Co. Ltd [1969] R.P.C. 1  .
 Warnink (Erven) BV v. J. Townend & Sons (Hull) Limited [1980] R.P.C. 31  .
 White Horse Distillers Ltd v. Gregson Associates [1984] R.P.C. 61  .

Representation
Simon Thorley Q.C. and Colin Birss instructed by Bird & Bird appeared for the
plaintiffs. Michael Bloch and Richard Meade instructed by Willoughby & Partners
appeared for the defendant.
Laddie J.
: This is an action for passing off. The second and third plaintiffs, Kraft Jacobs
Suchard (Schweiz) AG and Chocoladefabriken Lindt & Sprüngli (Schweiz) AG
respectively, are well known manufacturers of chocolate confectionery. In this
judgment I shall refer to the second plaintiff and its chocolate-making predecessors
as “Suchard” and to the third plaintiff and its chocolate-making predecessors as
“Lindt”. Suchard and Lindt have been involved in the manufacture of chocolate for a
very long time. The history of Suchard can be traced back to 1826 when Philippe
Suchard opened a small chocolate factory in Serrières near Neuchâtel. The
company grew and its products were sold not only in Switzerland but were exported
extensively. The modern Lindt company can be traced back to two earlier
businesses. One was started by Rodolphe Sprungli-Ammann who opened the first
chocolate factory in the German-speaking part of Switzerland in the early nineteenth
century. The other was started by Rodolphe Lindt who set up his business in 1879 in
Berne. Like Mr Sprüngli-Ammann's business, Mr Lindt's business expanded and it
began to export its products.
The first plaintiff, CHOCOSUISSE Union Des Fabricants Suisses de Chocolat, to
which I will refer as “Chocosuisse”, is a co-operative society formed under the Swiss
Code of Obligations . It is an association for the Swiss chocolate industry of which 13
out of 16 Swiss chocolate manufacturers are members. Lindt and Suchard are
members.
Swiss chocolate makers have played a major role over the years in the development
of the art and technology of chocolate-making. According to the plaintiffs, chocolate
made in Switzerland has acquired in this and other countries a reputation for quality.
It was for this reason that Chocosuisse was formed. One of its main tasks is the
protection of the denomination of origin “Swiss” against any use which it and its
members regard as illegitimate. Mr Rolf Bloch, who is currently a board member of
Chocosuisse and the chairman of the Chocosuisse committee for the protection of
the designation of origin “Swiss *121 chocolate”, gave evidence in these proceedings
that since its establishment in 1945 Chocosuisse has taken steps against more than
600 instances of what it regarded as misuse of the Swiss designation for chocolate.
Most of those actions consisted of warnings issued to companies believed to be
infringing the Swiss chocolate manufacturers' claimed rights in the word “Swiss” or
“Switzerland”.
Most targets of these efforts complied with Chocosuisse's requests without further
ado. There have been few cases, and none in the United Kingdom, which tested the
strength of those claimed rights. Although Chocosuisse was only established in
1945, its activities are a continuation of the activities carried on by a previous trade
association of Swiss chocolate makers.
The defendant, Cadbury Limited, hardly needs any introduction. It is a member of the
group of companies headed by Cadbury Schweppes PLC. It has been in the
chocolate business for over one hundred years and the evidence of its current
Marketing Director, Mr Alan Palmer, shows that it is now the United Kingdom's
leading chocolate confectionery manufacturer. Over the years its product range has
extended to chocolate confectionery products, including the most popular moulded
chocolate bar in the United Kingdom, Dairy Milk, one of the most popular boxed
chocolate brands. Milk Tray, and other well known brands such as Crunchie and
Flake. Its wide range of chocolate products are sold under a variety of names. Some
of those names, like Milk Tray, Crunchie, Flake, Mint Crisp and Fruit and Nut, allude
to the characteristics of the product which bear them. Other names, such as Tiffin
and Top Deck, do not. Cadbury's current product range includes chocolate
confectionery, sugar confectionery and cocoa based drinks and in addition dairy
products, milk and milk products, drinks, yoghurt, desserts, trifles, mousse, biscuits,
wafers, cakes, ice cream and frozen gateaux. Mr Palmer said, and it was not
disputed that “Cadbury” is a household name and is the pre-eminent name for
chocolate in the United Kingdom. In the United Kingdom sales of Cadbury branded
products last year totalled well in excess of £1 billion. Outside the United Kingdom
and Ireland the businesses of the group of which Cadbury is part have been largely
Commonwealth based, with major businesses in Australia, New Zealand, South
Africa and Canada. More recently, as part of its global expansion, Cadbury
Schweppes PLC has acquired and set up businesses in many other parts of the
world.
The current dispute arises out of the introduction onto the market by Cadbury of a
new chocolate product called “Swiss Chalet”. This is a confectionery bar which is
made of honey flavoured milk chocolate with inclusions consisting of small pieces of
almond nougat. The front of the packaging bears upon it in large, gold rimmed red
letters the words “Swiss Chalet” and, in a slightly smaller size, the well known script
form of the word “Cadbury”. The packaging also carries a picture of the snow-capped
Matterhorn Mountain in Switzerland with a chalet in a valley below it and the
Cadbury “glass and a half” logo. The front of the packaging is reproduced in Annex I
to this judgment.
Both sides agreed that the relevant legal principles for a passing off case like this are
as set out in Erven Warnink BV v. J. Townend & Sons (Hull) Limited [1980] R.P.C.
31 (the Advocaat case). In particular the plaintiffs, represented by Mr Simon Thorley
Q.C. and Mr Colin Birss, relied on the formulation in the *122 speech of Lord Fraser
which they said was directed specifically to the present type of passing off action -
namely one concerning a class of goods:
“It is essential for the plaintiff in a passing off action to show at least the following
facts:

 (1) That his business consists of, or includes, selling in England a class
of goods to which the particular trade name applies;
 (2) That the class of goods is clearly defined, and that in the minds of
the public, or a section of the public, in England, the trade name
distinguishes that class from other similar goods;
 (3) That because of the reputation of the goods, there is a goodwill
attached to the name;
 (4) That he, the plaintiff, as a member of the class of those who sell the
goods, is the owner of goodwill in England which is of substantial
value;
 (5) That he has suffered, or is really likely , to suffer, substantial
damage to his property in the goodwill by reason of the defendant
selling goods which are falsely described by the trade name to which
the goodwill is attached.” (page 105, line 41 to page 106, line 5)

The defendant, represented by Mr Michael Bloch and Mr Richard Meade, said that
Chocosuisse failed to meet the requirements set out in the first of Lord Fraser's five
criteria and therefore had no locus to sue. It also argued that all the plaintiffs failed in
relation to all of the other criteria.
Further it said that all three plaintiffs were debarred, by reason of their own unclean
hands, from obtaining any relief in this action, even if passing off was proved.
Before dealing with each of these issues in turn, it may be useful to look with some
care at the law in this area.
The Law
The speech of Lord Diplock in Advocaat traces the history of the action for passing
off starting with Perry v. Truefitt (1842) 6 Beav. 66, 49 E.R. 749 in which Lord
Langdale M.R. said at page 752.
“I think that the principle on which both the courts of law and of equity proceed, in
granting relief and protection in cases of this sort, is very well understood. A man is
not to sell his own goods under the pretence that they are the goods of another man;
he cannot be permitted to practice such a deception, nor to use the means which
contribute to that end. He cannot therefore be allowed to use names, marks, letters
or other indicia, by which he may induce purchasers to believe, that the goods which
he is selling are the manufacture of another person. I own it does not seem to me
that a man can acquire property merely in a name or mark; but whether he has or
not a *123 property in the name or the mark, I have no doubt that another person
has not a right to use that name or mark for the purposes of deception, and in order
to attract to himself that course of trade, or that custom, which, without that improper
act, would have flowed to the person who first used, or was alone in the habit of
using the particular name or mark.”
As Lord Diplock pointed out, citing the words used by Lord Parker in Spalding v.
Gamage (1915) 32 R.P.C. 273 :
“…nobody has any right to represent his goods as the goods of somebody else.”
(page 283, line 28)
Further on in his speech, Lord Parker said:
“There appears to be considerable diversity of opinion as to the nature of the right,
the invasion of which is the subject of what are known as passing-off actions. The
more general opinion appears to be that the right is a right of property. This view
naturally demands an answer to the question - property in what? Some authorities
say property in the mark, name, or get-up improperly used by the defendant. Others
say, property in the business or goodwill likely to be injured by the misrepresentation.
Lord Herschell in Reddaway v. Banham expressly dissents from the former view;
and if the right invaded is a right of property at all, there are, I think, strong reasons
for preferring the latter view. … Further, it is extremely difficult to see how a man can
be said to have property in descriptive words, such as `Camel Hair' in the case of
Reddaway v. Banham where every trader is entitled to use the words, provided only
he uses them in such a way as not to be calculated to deceive. Even in the case of
what are sometimes referred to as Common Law Trade Marks the property, if any, of
the so-called owner is in its nature transitory, and only exists so long as the mark is
distinctive of his goods in the eyes of the public or a class of the public.” (page 284)
The type of action of which Perry v. Truefitt and Spalding v. Gamage are examples
were described by Lord Diplock in Advocaat as the “classic form” of passing off. To
succeed in this, the plaintiff has to prove that he has built up the necessary goodwill
by his own endeavours or that he has acquired it from a predecessor who had done
so. He can not succeed if he has just entered the market and not built up the
necessary goodwill. Cases could arise where his rights are shared with someone
else either because the original goodwill had been split between two or more
successors or each owner had built up his own reputation himself and side by side
with the others. Lord Diplock referred to Dent v. Turpin (1861) 2 J. & H. 139 and
Southern v. Reynolds (1865) 12 L.T. (N.S.) 75 as examples of this. Even so each of
the owners of the shared reputation can sue to prevent someone else trying
belatedly to use the same or a sufficiently similar name or mark. Indeed if the
newcorner is trying to use the name or mark on essentially the same goods or
services, the case for passing off will be more easily made out since the nature of
the products or services will not help the public to distinguish between those derived
from the plaintiff and those derived from the defendant. Furthermore the owner of the
goodwill protected by a classic passing off action can do what he pleases with the
mark. He can raise or lower the standards of his goods or products, change the
location of *124 manufacture, change the ingredients he uses and, if he wants,
decide to use the mark or name on an entirely different range of goods or services,
as long as this will not lead to a collision with some other trader who already used
the same or a similar name or mark in relation to the new line of business. This
freedom of action arises because the goodwill belongs to the plaintiff and not to
anyone else. The damage which he must prove to succeed in the action is damage
to his business. However there are limits on the ability of a trader to acquire a
protectable goodwill in a mark or name. In particular, on public policy grounds the
courts will be most reluctant to allow him to obtain a monopoly in descriptive words,
as noted by Lord Parker in the extract from Spalding v. Gamage cited above. Thus it
is very difficult to succeed in a classic passing off action where the mark is highly
geographical or where it is descriptive of or the name for a particular type of product.
The classic form of passing off action is to be contrasted with what Lord Diplock
called the “extended form of passing off first recognised and applied by Dankwerts J.
in the Champagne case (Bollinger v. Costa Brava Wine Co. Ltd [1960] R.P.C. 16 )”.
That new form of action can be traced from the Champagne case, through the
Sherry (Vine Products Ltd v. Mackenzie & Co. Ltd [1969] R.P.C. 1 ) and Scotch
Whisky cases (John Walker & Sons Ltd v. Henry Ost & Co. Ltd [1970] R.P.C. 489 )
to Advocaat itself. The most recent example of it is the Elderflower Champagne case
(Taittinger SA v. Allbev Ltd [1993] F.S.R. 641 ). Although all these have grown from
passing off roots, they display marked differences to the classic form of the cause of
action. In the Champagne type of case, protection is given to a name or word which
has come to mean a particular product rather than a product from a particular trader.
Normally it is the perfect and perhaps only adequate term to describe the product.
Just as an emulsion of fats and water together with other digestible ingredients
derived from a cow is called milk and nothing else, so a sparkling white or rose wine
made in a particular defined area in France by a process of double fermentation in
the bottle is called champagne and nothing else. The word is entirely descriptive of
the product. This is clear from the speech of Lord Diplock where the descriptive
nature of the mark was referred to on numerous occasions including in the following
passage:
“In the Champagne case the descriptive term referred to the geographical
provenance of the goods, and the class entitled to the goodwill in the term was
accordingly restricted to those supplying on the English market goods produced in
the locality indicated by it. Something similar was true in the Sherry case where the
word `sherry' as descriptive of a type of wine unless it was accompanied by some
qualifying geographical adjective was held to denote wine produced by the solera
method in the province of Jerez de la Frontera in Spain and the class entitled to the
goodwill in the word was restricted to suppliers on the English market of wine
produced in that province. In the Scotch Whisky case the product with which the
case was primarily concerned was blended whisky and the class entitled to the
goodwill in the descriptive term `Scotch Whisky' was not restricted to traders who
dealt in whisky that had been blended in Scotland but extended to suppliers of
blended whisky wherever the blending process took place provided that the
ingredients of their product consisted exclusively of whiskies that had been distilled
in Scotland. But the fact that in each of these first three cases the descriptive name
under which goods of a particular type or composition were marketed by the plaintiffs
among others happened to have geographical connotations is in *125 my view
without significance. If a product of a particular character or composition has been
marketed under a descriptive name and under that name has gained a public
reputation which distinguishes it from competing products of different composition, I
can see no reason in principle or logic why the goodwill in the name of those entitled
to make use of it should be protected by the law against deceptive use of the name
by competitors, if it denotes a product of which the ingredients come from a
particular locality, but should lose that protection if the ingredients of the product,
however narrowly identified, are not restricted as to their geographical
provenance.”(page 96)
The fact that the extended form of action can, in the correct circumstance, protect
descriptive words is of significance for a number of reasons. First, at one stage
during the course of his argument, Mr Michael Bloch seemed to suggest that the
plaintiffs could not succeed in this action because the expression Swiss chocolate
was descriptive. However, it seems to me that type of argument will not of itself
defeat a Champagne type of case. Furthermore the descriptiveness of the protected
name also leads to other differences between this and the classic form of passing
off. In the new extended form of the action, no proprietor currently using the name in
relation to his goods can prevent any new competitor of his making or selling goods
to which the name can accurately be applied and from using the name for that
purpose. The current users of the descriptive word can only use their shared interest
to prevent others from using it on products for which it is not a proper description or
designation. Furthermore it is not open to any existing user of the protected name to
use it on products for which it is not an accurate description or designation. Messrs
Taittinger are no more entitled to use the word “Champagne ” on a non-alcoholic
cola drink than anyone else. Those entitled to use the word share a common interest
in protecting its purity as a designation applied to a particular type of goods but in no
real sense does it belong to an individual trader to do with as he likes. As Lord
Diplock stated:
“…it is the reputation that that type of product itself has gained in the market by
reason of its recognisable and distinctive qualities that has generated the relevant
goodwill. So if one can define with reasonable precision the type of product that has
acquired the reputation, one can identify the members of the class entitled to share
in the goodwill …” (page 98)
The difference in this respect between the proprietor's rights in marks protectable by
classic passing off proceedings and his rights in famous generic terms protectable by
the extended form of passing off inevitably has impact on other parts of the action. In
Advocaat it was said that mere entry into the market by a new trader who uses the
term accurately on his products would not give him any right of action for passing off.
Lord Diplock said, although it was not strictly in issue in the Advocaat case, that the
new entrant must have himself used the descriptive term long enough on the market
in connection with its own goods and have traded successfully enough to have built
up a goodwill for his business before he could sue. In this respect the House of
Lords was carrying over one of the factors which a plaintiff needed to prove in a
classic passing off action. However the reality is somewhat different. Once a trader
becomes a legitimate member of the trade using a protected descriptive term, he
cannot be sued for passing off by other members of the trade and, if he joins in a
passing off action to protect the term, the courts have not inquired too deeply into
how extensive his *126 own trade has been. By the same token the court does not
look only or even primarily at the direct damage to the individual plaintiffs in the new
form of action. In the Advocaat case it was pointed out that the plaintiff, Warnink, had
no cause of action for passing off in its classic form because no member of the
public would consider the defendant's product to be either the plaintiff's product or a
product from Holland (page 91). However in holding that Warnink could sue
successfully under the extended form of action Lord Diplock quoted with approval
the finding of the trial judge that the defendant would cause:
“…damage to Warnink in the trade and the goodwill of their business both directly in
the loss of sales and indirectly in the debasement of the reputation attaching to the
name `Advocaat ' if it is permitted to be used of alcoholic egg drinks generally and
not confined to those that are spirit based.” (page 91, lines 19-23 emphasis added).
What can be protected by this form of action is the accuracy and exclusivity of the
descriptive term. This is apparent not only from the passage in Advocaat just quoted,
but also from the recent decision of the Court of Appeal in the Elderflower
Champagne case. There the plaintiff, Taittinger, sued a company which was making
a non-alcoholic sparkling drink in Surrey which it was selling under the name
“Elderflower Champagne”. The trial judge had held that all the necessary ingredients
for a successful passing off action had been made out save for proof of likelihood of
substantial damage to the plaintiff. In the Court of Appeal the plaintiff argued that the
trial judge had erred because if the defendant continued to call its product
“Elderflower Champagne”:
“… the effect would be to demolish the distinctiveness the word champagne, and
that would inevitably damage the goodwill of the champagne houses.” (page 669)
This argument was accepted. Peter Gibson L.J., having cited a passage from CIVC
v. Wineworths [1991] 2 N.Z.L.R. 432, said at page 670 :
“By parity of reasoning it seems to me no less obvious that erosion of the
distinctiveness of the name champagne in this country is a form of damage to the
goodwill of the business of the champagne houses.”
He also noted, with apparent approval, that Sir Robin Cooke P. in Wineworths v.
CIVC [1992] 2 N.Z.L.R. 327, CA :
“thought the [Champagne ] case exemplified the principle that a tendency to impair
distinctiveness might lead to an inference of damage to goodwill…”
The point was also put clearly by the Master of the Rolls in the Elderflower
Champagne case:
“Like the judge, I do not think the defendants' product would reduce the first plaintiff's
sales in any significant and direct way. But that is not, as it seems to me, the end of
the matter. The first plaintiffs' reputation and goodwill in the description Champagne
derive not only from the quality of their wine and its glamorous associations, but also
from the very singularity and exclusiveness of *127 the description, the absence of
any qualifying epithets and imitative descriptions. Any product which is not
Champagne but is allowed to describe itself as such must inevitably, in my view,
erode the singularity and exclusiveness of the description Champagne and so cause
the first plaintiffs damage of an insidious but serious kind. The amount of damage
which the defendants' product would cause would of course depend on the size of
the defendants' operation. That is not negligible now, and it could become much
bigger. But I cannot see, despite the defendants' argument to the contrary, any
rational basis upon which, if the defendants' product were allowed to be marketed
under its present description, any other fruit cordial diluted with carbonated water
could not be similarly marketed so as to incorporate the description champagne. The
damage to the first plaintiffs would then be incalculable but severe.” (page 678)
It appears, therefore, that in this extended form of action it is mainly reduction of the
distinctiveness of the descriptive term which is relied on as relevant damage. The
difference between this and the type of damage which the plaintiff needed to show in
a classic passing off action is illustrated in the judgment of Millet L.J. in Harrods Ltd
v. Harrodian School Ltd [1996] R.P.C. 697 .
In the end, it is a matter of semantics whether the Champagne type of action is
called a separate and new tort, as was suggested in Vine Products , or merely a new
branch of the existing tort. That classic passing off and Champagne cases contain
many features in common and the latter has developed out of the former is made
clear by the speeches in Advocaat . But there are also significant differences to
which I have made reference to above. Although in current state of development
the common law does not recognise a general right in one trader to complain
of damaging dishonest trading practices committed by his competitors,
nevertheless in this area the law has advanced in effect to give rise to a civilly
enforceable right similar to an appellation controlée. As both Dankwerts J. in
Champagne and Lord Diplock in Advocaat explain, this development was justified on
public policy grounds. This, it appears to me, is what lays behind the Master of the
Rolls' views, expressed in Elderflower Champagne at page 678 :
“… this is the reputation which the Champagne houses have built up over the years,
and in which they have a property right. It is not in my view unfair to deny the
defendants the opportunity to exploit, share or (in the vernacular) cash in on that
reputation, which they have done nothing to establish. It would be very unfair to allow
them to do so if the consequence was, as I am satisfied it would be, to debase and
cheapen that very reputation.”
Before turning to the facts in this case, there is one other matter of general principle
which arises out of the arguments deployed in this case and is convenient to deal
with here. In Advocaat Lord Diplock seemed to suggest that a plaintiff would need to
show that the descriptive term had acquired a public reputation and goodwill:
“… denoting a product endowed with recognisable qualities which distinguish it from
others of inferior reputation that compete with it in the same market.” (page 95)
*128
The defendant relied on this passage but, rightly in my view, conceded that this
could not mean that in all Champagne - type cases the descriptive term for which
protection was sought only covered “superior” products. It conceded that it was
enough if the qualities were different. In my view it goes somewhat further than this.
In a classic passing off action, it is not necessary to show that the plaintiff's goods
are better, cheaper or in any other way different to those of the defendant or others
in the trade. Indeed in many cases the major value of a successful trade mark is that
it helps to draw in custom even when there is no inherent superiority or difference
between goods or services bearing the mark and those not bearing it. To take a
common current example, it is well known that a considerable number of companies
sell fizzy cola drinks under their own brand names. Many of them are likely to be
indistinguishable in taste or ingredients, the advances of technology having made it
easier for one manufacturer's products to be analysed and copied by others. The
difference in sales and the ability to charge higher prices can be attributed to
effective marketing and, in particular, the use of well-known brand names. It is the
reputation in the brand name which, to use the words of Lord MacNaghten in IRC v.
Muller [1901] A.C. 217 at 223 , is the attractive force which brings in custom.
Although the products are the same, they come from distinct sources, that is to say
separate manufacturers or retailers, and the customer learns to prefer one to the
other because the trade mark is perceived by him to be a representation of good,
reliable or merely known and liked quality, price, ingredients or merely for reasons of
fashion or snob appeal.
It should be possible to protect by the extended form of passing off a descriptive
term if it is used in relation to a reasonably identifiable group of products which have
a perceived distinctive quality. If there is no difference or discernible difference in
quality and ingredients between goods sold under or by reference to the term and
competing goods, that should not prevent a successful passing off action from being
brought. Thus the ability of the Champagne houses to sue successfully for passing
off would not be destroyed if, in fact, other manufacturers in other areas of the world
produced a sparkling wine equal in quality and indistinguishable in taste from any
one of the numerous wines accurately sold as Champagne. On the contrary the fact
that the Champagne still had a cachet which made products sold under that word
attractive to the customer is the hallmark of a particularly valuable mark. Similarly, if
with modern technology foreign distillers were able to match the quality and taste of
any of the wide range of beverages sold accurately under the name “Scotch
Whisky”, it would not diminish the right of traders dealing in the latter from
succeeding in passing off against those who misused the name.
When Lord Diplock referred, in the passage cited above, to the reputation that the
type of product has gained “by reason of its recognisable and distinctive qualities”, I
do not understand him to be saying that those qualities have to exist in fact and be
distinctive in fact. If the relevant public believe or perceive there to be special
qualities, that should be enough. If it were otherwise, this would be a significant
difference between classic and extended passing off actions. It would be a limitation
on the extended form of the action which would serve no real purpose but would
undermine its usefulness in many, if not most cases. *129 Furthermore, if one looks
at Lord Fraser's formulation of the cause of action, there is no suggestion that the
class of goods protected by the generic name must be distinguishable in fact from all
competing goods. On the contrary, his speech seems to point in the opposite
direction. As he put it, what is necessary is that there should be a defined class of
goods to which the name applies and that, in the minds of the public or a section of
the public “the trade namedistinguishes that class from other similar goods” (my
emphasis)
This point is of importance in this case because evidence was adduced directed to
showing that there was no relevant difference in recipe and no discernible difference
in taste between a Swiss chocolate made in Switzerland and some other chocolates
made, for example, in a number of other countries on the continent of Europe. That a
product of the same physical and taste attributes can be and is made outside
Switzerland as is made inside is demonstrated, if it was ever in doubt, by the fact
that a number of Swiss chocolate manufacturers have met the growing demand for
their products by setting up factories in other countries in which they make
chocolates to the same recipe and quality as those made in Switzerland. Subject to
certain exceptions which I will deal with hereafter, these are not marked “Swiss” or
“Swiss chocolates”. However if the words “Swiss chocolate” otherwise meet the
criteria for protection by passing off proceedings, I cannot believe that the plaintiffs
should fail simply because products which are indistinguishable on a blind tasting are
capable of being made and may in fact be made elsewhere. I do not read the
speeches in Advocaat to require me to come to such a conclusion.
The Facts
Is there a class of goods with a protectable goodwill?
The words “Swiss chocolate” are clearly descriptive. It is only if they are taken by a
significant part of the public to be used in relation to and indicating a particular group
of products having a discrete reputation as a group that a case of passing off can get
off the ground. I have had to bear this is mind when assessing the evidence of what
the words mean to members of the public. If they convey nothing more than their
descriptive meaning, the action must fail. The point can be illustrated by an example.
If a trader used the expression “French ball-bearings” or “Italian pencils” neither
would convey to most members of the public anything other than that the ball-
bearings and the pencils came from France and Italy respectively. There is, as far as
I am aware, no public perception that ball-bearings from France or pencils from Italy
form a discrete group of products having any particular reputation. These exceptions
would therefore be taken as indicating nothing about the goods in respect of which
they are used save that they come from a particular geographical location. If the
expressions were used on ball-bearings or pencils made in England there would be,
no doubt, a breach of the Trade Descriptions Act. But in the Champagne case it was
held that that breach of the provisions of a predecessor to that Act, the Merchandise
Marks Act, did not give rise to a civil cause of action. Since the two expressions are
not associated with any particular group reputation, an action for passing off would
fail. On the other hand a number of cases have held that the word Champagne,
when put on a bottle of sparkling wine, is not merely descriptive of a group of
products but that those products have a communal *130 reputation or recognition
which distinguishes them in the eyes of the public from wines not carrying that word.
It is that communal reputation which is the basis for the cause of action. The
necessity for this caution was illustrated by one of the evidence-gathering exercises
conducted by the defendant. Two employees of the defendant's solicitors visited a
shopping parade, bought a Cadbury Swiss Gateau and then asked about 60
members of the public in what country did they think the product was made. Only
seven said Switzerland. No one suggested that this was a reliable market survey and
it was not put forward as such. But even if most of the customers had volunteered
without the benefit of a leading question that they thought the product came from
Switzerland it would not have shown that the words “Swiss Gateau” have a
reputation relevant for passing off purposes. All that it would show is that some
people think that a Swiss gateau is made in Switzerland. Similarly, when a witness
like Mr Blacklock says1 :
“I was reasonably certain in my own mind that `Swiss chocolate' meant chocolate
made in Switzerland.”
this goes no way to demonstrating any relevant group reputation and it therefore
does not assist the plaintiffs.
The evidence on this issue can be gathered into two categories; (i) members of the
public, (ii) retailers and others in the trade.
Members of the public
Witness statements from a number of members of the public were served. Some
were the subject of Civil Evidence Act notices, some were accepted without cross-
examination and some were tested orally. Some guessed that Swiss chocolate
referred only to chocolate made in Switzerland. For example Mrs Wilce said:
“Miss Tayler asked me what I took Swiss chocolate to mean … I assumed I was to
identify chocolate made in Switzerland although I did explain that I did not know
much about it.”
This type of evidence takes the plaintiffs' case nowhere. However there were many
who thought it meant more than just a geographical origin. It appeared to have a
reputation for quality, expense and exclusivity. A few examples of such evidence are
set out below. A number of the defendant's witnesses were asked what Swiss
chocolate meant to them. Among the responses were:
Ms Petra Wöstefeld - “I said it was very smooth chocolate, smoother than English
chocolate and it comes from Switzerland.”
Mr Ben Warner - “To me Swiss chocolate is quality and and exclusive. I'd say it
comes from Switzerland.”
*131
Mrs L. Tear - “I answered by stating I thought it was creamier chocolate which was
more expensive. I assume it is from Switzerland.”
Miss O'Connor - “I said I thought it was nicer, smoother and better chocolate. I said I
thought it was made in Switzerland.”
Mrs Flinders - “To me Swiss chocolate means quality, good taste and usually it
comes in nice packaging. To me Swiss chocolate is a luxury product. It has no real
geographical significance. … To me Swiss chocolate is just a quality product.”
Mr Dalton - “To me it is a higher quality chocolate, higher quality than everyday
chocolate. The Swiss element does not mean that the product comes from
Switzerland.”
Ms Jarvis - “Dawn Osborne, asked me `What do you think of as Swiss chocolate?' I
said `Better quality, whether it's true or not, I'm not sure'.”
This evidence was consistent with some of the evidence given under cross
examination.
Mr Carpenter gave evidence that he ate chocolate himself but never Swiss
chocolate. However he said that he did buy Swiss chocolate as a present for his
girlfriend. When asked why he bought them for her rather than the sort of chocolates
he ate himself he said:
“Because she has good taste, I suppose. I think it is associated like the best of the
quality of the chocolate range.”
Ms Susan Thompson also gave evidence that she did not buy Swiss chocolate but:
“A. No, I probably buy it as gifts, though.
Q. In preference to English chocolate?
A. Probably, yes.
Q. Why is that?
A. I suppose because of the image of it.
Q. and the image is?
A. Slightly more unusual.”
There were a number of other pieces of evidence much along the same lines. A
considerable number of members of the public seemed to think that Swiss chocolate
was different to and more up-market than other types of chocolate but the precise
reason for feeling that and the respects in which Swiss chocolate was thought to
differ from other chocolates varied from witness to witness. On this *132 issue, as on
all others where evidence from members of the public is concerned, both parties
agreed that it was impossible from the comparatively small number of witnesses
called to come to any quantitative conclusion on what the public's view is. They give
the court a flavour of the diversity of opinions held and some feel for why certain
opinions are held.
Trade witnesses
The most important retailer called was Ms Kirkbride. She is a “Product Selector” for
Marks and Spencer plc. She is involved in selecting and developing chocolate
products for sale in Marks & Spencer's retail outlets throughout the United Kingdom.
She has worked at Marks & Spencer since April 1994 and has been employed as a
product selector since that time. One of the lines she has been involved in
developing and of which she is currently in charge is Marks & Spencer's line of Swiss
chocolate products. Her evidence was that Marks & Spencer's Swiss chocolate has
been very successful and is one of that company's core products. Her employer sells
in excess of 100,000 items of Swiss chocolate per week. Marks and Spencer have
stocked a Swiss chocolate mountain bar for 10 years, an extra fine Swiss chocolate
bar for three years and a big Swiss chocolate tablets bar for five years. It also stocks
some seasonal products such as Swiss chocolate champagne truffles at Christmas
and Swiss chocolate valentine hearts for Valentines Day. The wrappers for the Extra
Fine and Milk chocolate are reproduced at Annex II to this judgment. This chocolate
is made in Switzerland. In this respect Marks and Spencer is in competition with
other major retailers. For example Waitrose Plc also sell a bar of chocolate under the
name “Swiss White Chocolate” and Boots also sells “Swiss Milk chocolate”. The
wrappers for the former is reproduced in Annex III. These products also are made in
Switzerland.
Miss Kirkbride said that Swiss chocolate was sold because it provided a “point of
difference” over standard milk chocolates. She also said that the Marks and Spencer
Swiss chocolate was perceived by Marks and Spencer to have a reputation amongst
the public as a premium product and the fact of its Swiss origin was “a unique selling
point”. She said:
“Each of our Swiss chocolate wrappers bears the description `Swiss chocolate'. We
make sure that the word `Swiss' is emphasised on the label. This is very important in
establishing the point of difference of the products and capitalising on the reputation
of Swiss chocolate. Not only do we refer to it as St Michael's Swiss Milk chocolate
we also have a separate brand used on all our Swiss chocolates which shows the
word `Swiss' on a mountain background in a oval logo.”
Although Ms Kirkbride was cross-examined as to the price differential between
Marks and Spencer Swiss chocolate and other non-Swiss chocolates sold by that
company, none of this evidence quoted above was challenged.
Evidence also was given by Cadbury's marketing director, Mr Palmer. The following
passage comes from the transcript of his cross-examination:
“Q. Would I be right in saying this, that over the years you have come to appreciate
that members of the public do recognise Swiss chocolate as being something?
*133
A. I think they recognise Swiss brands as being something. I am not sure that they
would be able to describe explicitly what Swiss chocolate per se was.
Q. Their reaction is going to be something like. `It is high quality'.
A. I think the words used in this stand today were smooth and sometimes creamy.
People talk about smooth. People talk about creamy. People use a number of, I
would say, fairly bland adjectives to describe chocolate from the continent.
Q. We were talking about Swiss chocolate. Was your answer directed to Swiss
chocolate or continental?
A. It was directed to Swiss, but I think in the context of which a number of other
continental chocolates would probably be in the same bracket.
Q. So you are accepting that some members of the public, in your experience, have
a perception as to a type of quality that they are going to get from a product called
Swiss chocolate.
A. Yes, I think that is probably true.”
Further, during the cross-examination of Mr Porterfield, the Area Manager for the
duty free division of Suchard, Mr Michael Bloch suggested to him that in the 1970s at
least, Swiss chocolate had a “certain cachet”. Mr Porterfield agreed. It was not
suggested that the cachet had diminished with the passage of time.
Bearing in mind all the evidence, I have come to the conclusion that the words
“Swiss chocolate” have acquired in England a distinct reputation. Although it refers to
chocolate which emanates from Switzerland, the plaintiffs have proved that to a
significant part of the public here those words denote a group of products of
distinctive reputation. Further, the actions of major retailers like Marks and Spencer
reinforce that conclusion. They are experts in assessing and catering to the wishes
of the public. I accept Ms Kirkbride's evidence as indicating Marks and Spencer's
view that the words “Swiss chocolate” had a reputation for quality among a
significant part of the public. The fact that members of that public have different
views of what the features of the distinctive quality are or are incapable of defining it,
is of little relevance.
However, even if the words have acquired a reputation, it is necessary to identify
what group of products are entitled to use it. Both parties accepted that, in
accordance with the speech of Lord Diplock in Advocaat , the plaintiffs needed to
identify the class or group with reasonable precision. On this issue the parties were
far apart. Cadbury suggested that the words “Swiss chocolate” could now be used
on such a diffuse class of products from different places in the world, to different
recipes and having different tastes that there really was no class at all. On the other
hand the plaintiffs, understandably, were anxious to argue that the class was as
narrow as possible, thereby excluding more of their competitors. To this end in the
statement of claim the plaintiffs said that:
6. “For the purposes of this action the plaintiffs will rely upon the following factors as
identifying Swiss Chocolate: *134

 (a) It is made in Switzerland;


 (b) It has at least 25 per cent cocoa solid content for milk and plain
chocolate, as is required by Swiss and EC law (Article 333 of the Swiss
Food Law Ordinance (Ordonnance sur les denrees alimentaires, ODAI
du l mars 1995) and Paragraph 1.21. of Annex I of EC Directive
73/241/EEC )
 (c) It contains no vegetable fat other than cocoa fat; and
 (d) It has a smooth texture due to the fact that there is a high
percentage of fat and a small chocolate particle size.”

They said that this defined the class of products to which the words Swiss chocolate
could be properly applied. Cadbury, beside disputing the classification, also said that
it was so nebulous as to be meaningless. It asked for further and better particulars of
feature (d) but did not receive any before the trial. However during the course of the
trial Mr Thorley asked for and obtained leave to amend the statement of claim to add
the following after (d):
“Neither the particle size nor the ratio of fat to particle size is defined in any
regulation. Further there is no universally accepted method of defining particle size.
For the purposes of this litigation, reliance is placed upon the 84th percentile Malvern
Mastersizer laser diffraction method (including where necessary a correction factor)
as described by Alan Sidaway. The Swiss Chocolate Manufacturers (as defined
above [in the statement of claim]) combine a fat percentage of over about 30 per
cent with a particle size (84th percentile as above) of under about 20 microns in
producing the said smooth texture of Swiss chocolate.”
This combined definition of the class creates great difficulty. First it is quite clear on
the evidence that a number of manufacturers of chocolate in Switzerland, some of
whom are members of Chocosuisse, sell products under the name “Swiss chocolate”
which do not meet the definition. There was a dispute as to whether this applied only
to three of the 16 manufacturers, as the plaintiffs concede, or to six of them as
Cadbury suggests. It seems to me that Cadbury are right on this issue, but it does
not matter which figure is correct. Since Lindt is acting for itself and in a
representative capacity for and on behalf of “all other persons who manufacture
chocolate in Switzerland and export such chocolate to the United Kingdom”, I do not
see how it can advance a definition of the class which would deprive some of those
of whose behalf it acts of the cause of action. In any event, the whole definition
appears to me to be fraught with difficulties. For example the particle size is defined
by reference to a figure obtained by using the 84th percentile Malvern Mastersizer
laser diffraction method. That is not a method which is used by anyone, apparently,
other than Cadbury. Furthermore it was clear from the evidence given to me that it is
quite impossible to define the quality of chocolate by reference to the figures set out
by the plaintiffs in their definition. Although it may be that a majority of Swiss
chocolate manufacturers happen to make chocolate sold under the Swiss chocolate
designation which fall within the plaintiff's definition, this appears to be little more
than a coincidence.
*135
Further the plaintiffs say that all Swiss chocolate contains no vegetable fat other than
cocoa fat. However the expert evidence shows that under current Swiss regulations
manufacturers are allowed to use up to 5 percent vegetable fat and that if a good
vegetable fat is used, such as CBE (Cocoa Butter Equivalent), not even an expert
taster could distinguish it from chocolate made without that ingredient. I was unclear
whether Mr Thorley was taking the position that a Swiss manufacturer who makes
chocolate containing CBE in accordance with Swiss regulations was entitled to call
his product Swiss chocolate here, as he would be entitled to do in Switzerland.
In any event, I think that the approach adopted by the plaintiffs in an attempt to
narrow down the class of persons who are entitled to rely on the reputation of the
designation is faulty. When a designation has a clear meaning in accordance with
common usage of the English language it is reasonable to start from the position that
the persons and products which can take the benefit of that designation are all those
who comply or are made in accordance with that meaning. Prima facie , Swiss
chocolate means chocolate made in Switzerland. Of course the circumstances of the
trade may show that the class has to be more narrowly defined than that.
Champagne could have been a term used to refer to any wine, whatever its colour
and whether sparkling or not, made in the eponymous area of France. As it happens
it has been used exclusively to designate a particular type of wine from that area with
the result that the reputation in that name is now restricted to that type of wine. The
same applies to Scotch whisky.
The term “Swiss chocolate” is the designation which has been used, save for very
minor exceptions, only on chocolate made in Switzerland in accordance with Swiss
food regulations. Subject to the restrictions imposed by those regulations, those
chocolates have been made to very different recipes. They taste different from each
other and are no doubt of different qualities inter se . Notwithstanding these
differences, together they have acquired a reputation for quality. If tomorrow many of
those manufacturers were to decide to make lower quality chocolates containing
some CBE, they would be free to do so. In the fullness of time this might impact
adversely on the cachet which attaches to the designation “Swiss chocolate”.
However, if they continue to meet Swiss food regulations, they will no doubt continue
to be entitled to call their products Swiss chocolate at home. I can see no reason for
defining the class of products entitled to bear that designation any more narrowly
than chocolate made in Switzerland in accordance with Swiss food regulations.
As I have mentioned, Cadbury argued that there is no class of goods which can be
identified with reasonable precision. It points to the fact that some members of the
public who believe that the Swiss chocolate is a product with a connotation of quality,
do not think that it comes from Switzerland. I have quoted above some witnesses
who appeared to have that view. Further it says that quite a few people thought that
chocolate which did not come from Switzerland did in fact come from there. For
example some Lindt chocolate is made in France. It is not marked with the words
Swiss chocolate. Nevertheless quite a few members of the public seem to have
assumed it was Swiss chocolate. However these facts do not alter my view as to the
identity of the class of goods entitled to use and exploit the reputation built up by the
designation Swiss *136 chocolate. The fact that public have no clear idea of the
characteristics of the goods which have the reputation is of little consequence. In the
case of Champagne, no doubt many members of the public who know of and rely on
the reputation acquired by that designation, know nothing about double fermentation
and do not know where the Champagne district of France is. Some may not even
know that the wine with the reputation comes from France. This is irrelevant. What is
required is to identify the class of goods which has built up and is entitled to exploit
the goodwill, not whether the public appreciates the identifying characteristics of the
class. Similarly the fact that some brand names, like Lindt, are so strong that
members of the public treat them as if they were a statement of Swiss origin does
not alter the fact that, save for very minor exceptions, the words “Swiss chocolate”
have been used only on chocolate made in Switzerland, presumably in accordance
with Swiss food regulations. It follows that I reject this criticism of the plaintiffs' case.
Since it is not in dispute that Cadbury's product is made in England, in fact from
standard Dairy Milk chocolate, it does not fall within the class which can be called
Swiss chocolate. As Mr Palmer accepted, it is a product which has no natural
association with products sold under the designation Swiss chocolate and it is not
made in accordance with anything which might be thought of as a Swiss recipe.
Has there been or is there likely to be relevant confusion?
The question now to be answered is whether the use of the words “Swiss Chalet” by
Cadbury on its product has led or is likely to lead members of the public to believe
that it is a Swiss chocolate. That is to say, have the plaintiffs proved that those
members of the public for whom the words “Swiss chocolate” have a reputation will
be confused into believing that this product is one of the group of products which can
be legitimately bear that designation. What the court is trying to do is decide how
members of the relevant public will react to the defendant's use of these words in the
real world. In many cases the circumstances in which the marks or get up are put
before the public and the way in which it reacts to them will be far removed from
what happens in court. This is particularly relevant to this dispute. The case was
conducted by lawyers and before a court with experience of trade mark and passing
off disputes and, as a consequence, perhaps a heightened awareness of the
possible value of trade marks and the differences between different marks and
packaging. But the detailed analysis of the Cadbury product at the trial has little
relationship to what would happen in the environment where it is being sold. Swiss
Chalet is a comparatively low cost item. In many cases it is likely to be purchased
without prolonged examination of its packaging. Even if the packaging is examined it
does not state where the product is made. Furthermore I think I must guard against
assuming that my personal view is one that would be shared even by a substantial
minority of the public at large. I first saw the Cadbury product knowing that it was the
subject of passing off proceedings and I examined it carefully. I think it is unlikely that
I would have taken it to be Swiss chocolate but it is now difficult to assess what my
reaction would have been had I not come across it knowing that it was the subject of
a passing off dispute but had seen it only on a supermarket shelf. Similarly I must not
pay regard to the views of those who could be categorised, in Foster J.'s words, as
morons in a hurry.
*137
Secondly, on a number of occasions the courts have said that on the issue of
deception of the public the intentions of the defendant are irrelevant, save where
there is a deliberate intention to deceive. In this case Mr Palmer accepted that the
name “Swiss Chalet” and the get up used on the Cadbury product were evocative of
Switzerland while Ms Caroline Cater, who was the product manager responsible for
the launch of the product, agreed that the image that Cadbury was seeking to create
from its wrapper, was something which emphasised, by one means or another, a
Swiss connotation and that this fitted with the Swiss Chalet brand name. Since, as
noted above, Mr Palmer accepted that there was no natural association between
Swiss Chalet and Swiss chocolate, these were pieces of evidence on which Mr
Thorley relied. However they really afford little support to the plaintiffs' case.
Whatever Cadbury's intention or expectation may have been, what counts is the
effect achieved or likely to be achieved with members of the public.
Thirdly, if there is any relevant confusion, I must assess whether it is sufficiently
extensive. On this issue the law is set out in the judgment of Morritt L.J. in
Neutrogena Corp. v. Golden Ltd [1996] R.P.C. 473 . I must have regard to whether
the plaintiff has proved the likelihood of confusion among a substantial number of the
public. It appears to me that this ties in which the question of damage. If the
confusion is extensive enough to inflict substantial damage on the plaintiff's
reputation then it is extensive enough to support the plaintiffs' claim.
In this case a number of members of the public were called to give evidence and
there was also evidence of the results of certain small surveys. The latter appear to
have been carried out primarily as witness collection exercises. As mentioned above,
the parties agreed that the witnesses called can only give me a flavour of the spread
of reactions which can be expected among the large number of individuals who
make up the English public. The same goes for the surveys. None were suggested
to be statistically reliable. Further, as with all survey evidence, each side to a greater
or lesser extent criticised the methodology adopted by its opponent.
It is clear that many people will not be confused by the use of the words “Swiss
Chalet” into believing that Cadbury's product is the Swiss chocolate of repute. For
some this is because the words “Swiss Chalet” would not be taken to be the same as
“Swiss chocolate” and for many, the impact of “Swiss Chalet” was submerged by the
use of the powerful “Cadbury” name and the association that the latter had with
Bournville in England. For people who made that association and for whom the
words “Swiss chocolate” meant a product of high reputation from Switzerland, the
domestic significance of the Cadbury name would prevent confusion. However, as
indicated below, there was evidence that at least some members of the public
appeared to think that Swiss Chalet was Swiss chocolate.
The plaintiffs carried out surveys as follows. A number of market researchers asked
members of the public to identify which of a number of products, listed on a card,
they bought. Those who indicated that they bought chocolate then were asked to go
into a hall or room in which there was a display stand which reproduced an in-store
confectionery display. In fact it replicated the display which was to be found in a shop
known as Photogenic in Leather Lane, London. *138 The display consisted of a triple
shelf unit. On the top shelf were boxes of chocolate. On the middle there were a
variety of bars of chocolate. On the bottom shelf there were chocolate enrobed
products such as “Kit Kat”, “Mars” and “Toblerone”. The products on display were
made by a variety of manufacturers. The middle shelf contained numerous Lindt
products, including some made in Switzerland, products known as “Galaxy”, and the
following Cadbury products:

 Cadbury 1848
 Cadbury Swiss Chalet
 Cadbury Dairy Milk
 Cadbury Bournville
 Cadbury Dream Double Fudge
 Cadbury Whole Nut
 Cadbury Old Jamaica
 Cadbury Golden Crisp
 Cadbury Black Forest
 Cadbury Roast Almond
 Cadbury Turkish
 Cadbury Grand Seville
 Cadbury Cappuccino
 Cadbury Fruit and Nut

Each of the products on display carried the usual little price sticker. The members of
the public were asked to choose “the cheapest Swiss chocolate product” that he or
she could see. Some chose Swiss Chalet. Some of these then gave witness
statements and most of those were then cross examined. Examples of some of the
evidence given by these witnesses is as follows:
(i) Mr Paul Bird picked Swiss Chalet. In his witness statement he was asked why he
thought it was Swiss and answered “it says on the label `Swiss Chalet' so I
presumed it was Swiss”. Under cross-examination he said that he liked and bought
Swiss chocolate. He also gave evidence that he had consumed quite a few Cadbury
products. He was asked whether he associated Cadbury's with any particular
country. He said he did not. His reasons for picking Swiss Chalet were not tested by
cross-examination.
(ii) Mr P. Newbey picked Swiss Chalet and in his witness statement he said that
when he was asked why he thought the item he had chosen was a Swiss chocolate
product he answered “because the name and the design on their showed a Swiss
scene with a chalet of some description”. Under cross-examination he was asked
whether, when buying a bar of chocolate, he paid particular attention to the country
from which it came. He said that “in general” he did not but on occasion he did. He
also said that he associated Cadbury with this country. He was not cross-examined
in relation to his reasons for having selected Swiss Chalet.
(iii) Mr Tony Croker's witness statement included the following:
“The legal representative then asked me why I thought that the item I chose was a
Swiss chocolate product. I answered that the bottom row were all *139 Cadbury
except for one which I think was German. I had to choose the cheapest and the top
row were all expensive boxes of chocolate. One bar in the next row had Swiss
written on it and they were all about 84p so I chose it. I thought it was a Swiss
chocolate product because it had `Swiss' on it.”
Under cross-examination he said that he did not recall seeing the Cadbury trade
mark on the product and it was put to him that the price sticker might have been
placed over it. In fact the actual bars of chocolate used in the survey were available
in court. On none of them did the sticker cover or obliterate the Cadbury mark to any
appreciable extent. Mr Crocker said that he ate Swiss chocolate but only
occasionally because it is generally more expensive. He said that he would not
normally go into a shop to look for the cheapest Swiss chocolate. He was asked to
pick up a bar of Cadbury chocolate and the legend “Cadbury's Limited, Bournville,
Birmingham” was read to him. He was then asked whether he considered that most
Cadbury's chocolate products are made in any particular country. Notwithstanding
the fact that counsel had just read out Cadbury's address, his response was
“I have not really given it much thought, but I would assume most of them are made
in England.”
He went on to say that he does not give thought to the country of origin of chocolate.
(iv) Mr Christopher Harrison explained in his witness statement that the reason he
chose Swiss Chalet was because it said “Swiss” on the wrapper and had pictures of
mountains on it. His cross-examination was short. He said that he liked Swiss
chocolates and also ate Cadbury chocolates. He also said that price was a factor
which he took into account when purchasing. The final part of his cross examination
was as follows:
“Q. In the ordinary way, if you went into a shop looking to buy bar of chocolate, you
would not have in mind, in particular, would you, where it came from?
A. No.”
He was not cross-examined about his reasons for concluding that Swiss Chalet was
a Swiss chocolate.
(v) Mrs Jane Bates said in her witness statement that she chose the Swiss Chalet
product as a Swiss chocolate because it had “Swiss” written on it and for no other
reason. Under cross examination she said that she knew of various Swiss
chocolates, Toblerone particularly coming to mind, but also that she would not buy
Swiss chocolate and did not think about what was Swiss chocolate in any great
depth.
(vi) Mr David Carpenter appeared to be alert to the possible difference between
Swiss chocolate and chocolate made by a Swiss company. He had selected Swiss
Chalet and when asked why he thought that it was a Swiss chocolate product he
said: *140
“… because it had `Swiss' on it and I was asked to pick a Swiss chocolate product,
not a product made by a Swiss company, there was other chocolate there made by
Nestle.”
As mentioned above, he was one of the witnesses who thought Swiss chocolate had
a reputation as being “the best of the quality of the chocolate range”. Under cross-
examination he said that he was familiar with the Cadbury name, the glass and a half
symbol and the familiar purple background used by Cadbury. He accepted that if “in
the ordinary way” he had gone into a shop looking for a bar of chocolate and had
seen Swiss Chalet in the Cadbury's chocolate range it was quite possible that he
would not have given any thought to where it was made.
(vi) Miss Rosina Kazimierczak said that she picked Swiss Chalet as Swiss chocolate
“because it said it on it”. However under cross-examination she said that she did not
purchase Swiss chocolate. She said that had she been intending to buy a new
chocolate she would have read what was on the back of the label but she did not do
so here.
In addition to evidence like this directed to individual witnesses obtained by the
plaintiffs' survey, the overall survey results, including all the reported responses,
were analysed and, for Cadbury, criticised by Mr Barter who had extensive
experience of the survey research industry. He was until very recently a senior
executive of National Opinion Polls Limited. He criticised the way that the surveys
were carried out, although some of his criticisms were withdrawn when he had
further information as to how the surveys had been designed and executed. His
major criticisms, so it appeared to me, were stated by him to be that (i) there was no
information as to what respondents understood “Swiss chocolate” to be, (ii) the
question introduces the double concept of “Swiss chocolate” and cheapness which
may have confused respondents and (iii) the bias introduced by the question and the
visual prompt was such that no statistical conclusions could be reached as to what
people understand by “Swiss chocolate” and to what proportion (if any) of the
chocolate purchasing public believe Swiss Chalet to be a “Swiss chocolate product”.
The second and third of these criticisms were explained particularly in paragraphs
15, 22 and 23 of his report.
These criticisms must be taken into account in assessing the overall value of these
surveys. It is perhaps a pity that the second one was not put to most of the witnesses
who were cross-examined. Furthermore Mr Barter did not suggest that his criticisms
explained all or even a majority of the answers on which the plaintiffs relied. His
objection that the surveys did not allow one to come to statistical conclusions was
not challenged. However his analysis of the surveys also threw up some interesting
figures which are set out in exhibit JHB 2 to his report. It shows that out of the large
range of products put on display for the survey, the most picked item was “Lindt
Swiss Milk”. There were numerous other Lindt products on display but nearly 20 per
cent of respondents picked this. The next most commonly selected product was
Swiss Chalet which was picked up by over 16 per cent of respondents. Furthermore
the selection of Swiss Chalet from among the Cadbury's products was very
pronounced. According to his figures, the numbers were as follows: *141
Product Number of Respondent
Cadbury 1848 0
Cadbury Swiss Chalet 63
Cadbury Dairy Milk 3
Cadbury Bournville 2
Cadbury Dream Double Fudge 2
Cadbury Whole Nut 1
Cadbury Old Jamaica 1
Cadbury Golden Crisp 1
Cadbury Black Forest 0
Cadbury Roast Almond 0
Cadbury Turkish 0
Cadbury Grand Seville 0
Cadbury Cappuccino 0
Cadbury Fruit and Nut 0
Mr Barter told me that the most likely reason why respondents selected Swiss Chalet
rather than any other Cadbury product was because it said “Swiss” on it.
In addition to this evidence, I had the benefit of certain surveys carried out by the
defendant and the examination of a number of witnesses who were selected from
among the respondents to those surveys. One of those surveys was conducted at a
newsagent called Rosendale News. Its chocolate display did not include Cadbury's
Swiss Chalet chocolate bars. On May 9, 1997 a witness gathering exercise was
conducted outside Rosendale News. Before it started a row of Cadbury's Swiss
Chalet chocolate bars was placed in the display. The display was cramped with a
large number of products squeezed into a relatively small space. A photograph of the
display is at Tab 19 of Bundle 7.2. Once the display had been set up, a researcher
from NOP approached people in Rosendale Road and asked them a preliminary
question about chocolate. They were then asked to go into Rosendale News to
identify and place in a basket all the bars and boxes of Swiss chocolate on display.
The researcher then recorded all the chocolate bars and boxes selected on a
questionnaire. The NOP researcher handed the questionnaire to the person who had
just undertaken the exercise and asked them to sign it to confirm that the answers
recorded were accurate. The researcher then asked them if they would be willing to
be interviewed. If they agreed, they were brought over to a member of the
defendant's solicitors to be interviewed. They were handed a bar of Cadbury's Dairy
Milk as a gift for having participated in the exercise. The solicitor then asked each
interviewee if he could ask a few questions about the exercise they had just
undertaken in the newsagents. He first asked all interviewees what “Swiss
chocolate” meant to them. He then asked various questions about the products that
had been selected during the exercise in the newsagents. The questions asked
varied slightly from interviewee to interviewee depending on what had been selected
and the answers they gave. The course that these conversations took is reflected in
the witness statements produced.
*142
In the course of this exercise, a number of people selected Swiss Chalet in response
to the request to put all the bars and boxes of Swiss chocolate in the basket. Many
did not. Examples of the evidence of some of these witness are set out below. The
mark (N) after a name means that the witness was not required to attend for cross-
examination.

 (i) Miss Calder (N) did not notice the Swiss Chalet bars but said she did not
think it was Swiss chocolate because it was from Cadbury's.
 (ii) Mr R Dalton (N) put Swiss Chalet in the basket. His witness statement
includes the following:

“I picked a Cadburys Swiss Chalet bar during the selection exercise because I
thought it was Swiss. I believed the label.”

 (iii) Ms C Dunkley (N) said that she thought Swiss chocolate was expensive
and a treat and usually came from Switzerland. However she did not put
Swiss Chalet in the basket. She said:

“I did not pick the Swiss Chalet Cadburys bar during the exercise in the shop
because of where it came from, i.e. it is Cadburys. I did not think it was Swiss
chocolate. … I told [the interviewer] that I did not think Swiss Chalet was
Swiss for a minute.”

 (iv) Mrs Madeleine Flinders (N), from whose witness statement I have already
quoted above, did not put the Swiss Chalet product in the basket. She said:

“I was shown a bar of Swiss Chalet which I had not seen during the selection
process in the shop. I thought it was a poor imitation of Swiss chocolate and
that it was probably made here.”

 (v) Mr Shaun Hooper (N) did not put Swiss Chalet in the basket. He said:

“[The solicitor] asked what Swiss chocolate meant to me. I said it is


supposedly made in Switzerland and it is usually rich, dark chocolate. I was
then shown a bar of Cadburys Swiss Chalet. I did not pick this during the
selection exercise in the shop but I would have done if I'd seen it.”

 (vi) Ms Linda O'Connor (N) from whose witness statement I have already
quoted did not put Swiss Chalet in the basket. She said she did not think it
was Swiss chocolate because it came from Cadbury.

One of the points which came out of this exercise was that a large number of
interviewees associated Cadbury with Bournville. This was the subject of comment
by Mr Thorley. One of the defendant's surveys, although not the Rosendale one, was
carried out in Birmingham. Of course Cadbury is a significant employer in Bournville
which is in Birmingham. It is not clear why the defendant carried out this exercise in
a location in which the defendant and the fact that it is English based is likely to be
particularly well known. Mr Barter was asked questions about this.
*143
He appeared to accept that carrying out a survey like this in Birmingham might well
skew the results, depending on where precisely in Birmingham the survey was
conducted. In any event he said that if he had been setting up that particular survey
he would not have chosen to run it in Birmingham. He said he might have set it up in
Wolverhampton but not near Bournville.
This gives one some flavour of the spread of evidence put before the court. I think it
is clear that for many people, including some of those for whom the words Swiss
chocolate mean a product of quality from Switzerland, the prominent use of the
famous Cadbury name and get up will be enough to prevent them thinking that Swiss
Chalet is a Swiss chocolate. Furthermore there are very many for whom the origin or
connections of Swiss Chalet will be irrelevant. In addition to this, I think that in some
cases it is likely that the questions asked in both the plaintiffs' and defendant's
surveys may have resulted in the interviewees entering into an area of speculation
which would not normally have crossed their minds. Many people, and particularly
those who are more observant, would not be confused. For them the words “Swiss
Chalet” will signify nothing but a pretty sounding name for a bar of chocolate. They
will convey no other message. However I have come to the conclusion that there are
some who will be struck by the largest and most prominent word on the defendant's
packaging namely “Swiss” and think that it is a reference to an attribute of the
product itself. I think it is likely that some will think that it is an indication that the
product is Swiss chocolate. Some, like Mr Crocker, may not see the reference to
Cadbury. Others might not believe that all Cadbury chocolate is made in England. In
fact it is not all made here. Cadbury like many other manufacturers has set up
factories or formed alliances abroad. Further, for some the get up of the packaging
with its typical Swiss scene will tend to reinforce the message of the word “Swiss”.
Finally some may be left in confusion as to whether Swiss Chalet is Swiss chocolate
or not.
I have found this the most difficult issue in the case. However, I have come to the
conclusion that a substantial number of members of the public who regard Swiss
chocolate as the name for a group of products of repute will be confused into
thinking that Swiss Chalet is a member of that group by reason of the use of the
name Swiss Chalet. It is likely that the number who think that will be smaller than the
number for whom there will be no confusion but, in my view, it is still likely to be a
substantial number. It follows that on this issue the plaintiffs succeed.
Damage
The plaintiffs argued that if it succeeds up to this point, damage is more or less
inevitable. In fact the defendant did not address any arguments to me directed
specifically to this issue. In any event I think the plaintiffs are right. If there is likely to
be confusion among a substantial part of the relevant public I think it must follow that
the exclusivity of the designation Swiss chocolate must suffer and that will damage
all the plaintiffs and those whom they represent. As the Master of the Rolls said in
Elderflower Champagne , that damage will be insidious.
*144
Unclean hands
A detailed and prolonged attack was launched by the defendant against the plaintiffs
to the effect (i) that they had failed to take all reasonable steps to ensure that the
words “Swiss chocolate” or “Swiss” in relation to chocolate continued to indicate to
the public in England chocolate made in Switzerland and (ii) had mislead the public
into believing that chocolate which was not made in Switzerland was made there.
Before dealing with the second of these topics, it appears to me that the first of them,
even if made out, would be of little relevance to this action. Even if Lindt, Suchard
and Chocosuisse had failed to do everything which they could reasonably have done
to secure the continued exclusive geographical connotation of the words “Swiss
chocolate”, it would be of no consequence if, notwithstanding their failings, the words
do convey that connotation. Conversely, even if the plaintiffs had taken all
reasonable steps to secure the exclusive connotation, in the end it would avail them
nothing if, notwithstanding their endeavours, the words had lost that meaning to
members of the public in England. What counts, for the purpose of this type of action
is whether or not the words sued on have the protectable meaning on which the
plaintiffs rely. If they do, it does not matter that the came about by accident, by virtue
of prolonged efforts by the plaintiffs or in spite of poor husbandry by them. I have
already found that such an exclusive connotation exists here.
The real argument concerned the alleged unclean hands of the plaintiffs in
misleading the public as to the origin of various of their own products. Cadbury said
that a plaintiff cannot succeed in passing off if his own use of the name, mark or
indicia relied upon is inherently deceptive. In support of this it relied on Newman v.
Pinto (1887) 4 R.P.C. 508 . On this issue the plaintiffs drew my attention to Ford v.
Foster (1871-1872) 7 Ch. App. 611 , Advocaat at first instance (supra , at page 50,
line 30 to page 51, line 10) and White Horse Distillers Ltd v. Gregson Associates Ltd
[1984] R.P.C. 61 . In Newman v. Pinto the plaintiff had marketed its cigars in boxes
bearing a label which bore the arms of Spain and Havana and the words “La Pureza
Habana Ramon Romnedo”. That label was the subject of a registered trade mark.
The boxes also carried a lock label which bore a signature of Ramon Romnedo. Mr
Romnedo did not exist and the plaintiff's products were not made in Havana. The
defendant sold cigars in boxes with essentially the same label on and was sued for
trade mark infringement. The Court of Appeal held that the plaintiff could not
succeed because his labels were fraudulent. Cotton L.J. said that the proper course
is for a court of law, and much more a court of equity, to refuse to interfere to protect
a trade which is assisted or supposed to be assisted by misrepresentations made by
those who are seeking the assistance of the court. Bowen and Fry L.JJ. also said
that the plaintiff should be refused relief but they expressed themselves more
forcefully than Cotton L.J. They both said that the plaintiff's labels bore a
concatenation of lies and that its business was fraudulent and it was for that reason
that relief was refused.
In Ford v. Foster the plaintiff sold shirts under the name “Ford's Eureka Shirts”. It
sued the defendant for using “Eureka” on its products. The Court of Appeal had little
difficulty in holding that a case of passing off had been made out. However the
defendant argued that the plaintiff should obtain no relief *145 because in its
literature and on its invoices it had falsely claimed that it's Eureka shirts were
protected by patent. It was not in dispute that the claims were false. Mellish L.J.
considered whether these facts would give rise to a defence to an action at law. He
said:
“Then would it be a defence to that action at law that the plaintiff has made false
representations to the public that his article was patented when in fact it was not? If
the false representation was in the trade mark itself, although I cannot find that that
point has ever been decided or raised in a Court of Common Law, yet I am disposed
to think, and indeed I have a pretty clear opinion, that if that question were raised it
would be held that the fact of the trade mark itself containing a false representation
to the public would be an answer at law to an action brought for a deceptive use of
the trade mark by the defendant. … It appears to me that it would come within the
rule Ex turpi causa non oritur actio ; that if the trade mark contains a false
representation calculated to deceive the public, a man cannot by using that, which is
in itself a fraud, obtain - I do not say an exclusive right - but any right at all. … But
where the trade is, as in this case, a perfectly honest trade, and where the trade
mark is, as in this case, a perfectly honest trade mark, I am clearly of opinion that
there is no common law principle upon which it is possible to hold that the fact of the
plaintiff having been guilty of some collateral fraud would be an answer to an action.
It would be impossible to plead at law as a justification for the defendants' committing
the fraud that the plaintiff had committed a fraud on someone else.”
He went on to say that the same applied to an action in equity. Mr Thorley relies on
this. He says that even if his clients had done anything which could be said to be
misleading, it was collateral to the existence of the reputation in the designation
“Swiss chocolate”. Indeed, if this defence is as formulated by Cadbury, namely that it
applies when the plaintiff's “own use of the name, mark or indicia relied upon is
inherently deceptive”, it is not made out here. Save for some trivial instances of the
word “Swiss” being used on Lindt Easter Eggs some years ago when the shell was
made of English chocolate although the contents were Swiss chocolates, no
allegation of deceptive use by the plaintiffs of the mark in issue, Swiss chocolate,
has been alleged or proved.
In the end I think Mr Thorley was right in suggesting that the approach to this issue
should mirror that taken by the Court of Appeal in Habib Bank Ltd v. Habib Bank AG
Zurich [1982] R.P.C. 1 , in relation to estoppel, namely a plaintiff should fail in the
action only in those cases where the court concludes that, in all the circumstances, it
is unconscionable for him to be given the relief he would otherwise be entitled to. I
did not understand this approach to be inconsistent with Cadbury's defence. Where
the plaintiff has engaged in misleading activities, the closeness of those activities to
the right he is seeking to enforce by legal proceedings will be an important factor to
be taken into consideration. Similarly the nature of the misleading activities must be
relevant to this issue. If the plaintiff has engaged in a prolonged and extensive
campaign to defraud the public the court is more likely to refuse him relief than would
be *146 the case when the misleading conduct is short in duration and small in
compass. find it difficult to believe that any court would refuse a plaintiff relief where
his activities were unintentionally misleading.
In the defence Cadbury has pleaded a large number of actions by the plaintiffs which
it says have deceived the public. The essential allegations appear to be as follows:
“Members of the first plaintiff, including the second and third plaintiffs, have used
`Swiss', `Switzerland' and Alpine illustrations in relation to products not manufactured
in Switzerland and the plaintiffs have permitted others to use the same in relation to
products not manufactured in Switzerland.
Members of the first plaintiff, including the second and third plaintiffs, and/or their
branches, associated companies and licensees (as defined in the Chocosuisse
Agreement) have promoted the fact that they are Swiss companies and have
promoted the following marks as being Swiss: Suchard, Lindt, Nestle, Toblerone and
Milka (`the Swiss Names').
By using the Swiss Names in relation to chocolate products, members of the first
plaintiff including the second and third plaintiff have deceived members of the public
in the United Kingdom into believing that such products were manufactured in
Switzerland and/or have created doubt in the minds of members of the public in the
United Kingdom as to whether or not such products were manufactured in
Switzerland.”
These are supported by lengthy particulars. On its face, it appears that Cadbury's
pleading extends as far as complaining that the plaintiffs have not sought to stop
third parties selling products under the names; Swiss rolls, Safeway Swiss Style
muesli, Alpen Swiss recipe muesli, Cadbury's Swiss Gateau, Kraft Swiss Cheese
and St Ives Swiss Formula Hair Repair Treatment. If that was what was intended by
the pleading, it was not put to any witness nor was it suggested that any of the
plaintiffs had any obligation to pursue these uses of the word Swiss. Nor was it
argued that any of these uses had anything to do with the designation Swiss
chocolate. Cadbury concentrated instead on activities of Lindt and Suchard. It is
convenient to deal with these separately.
Lindt's activities
There was no dispute before me that chocolates made by Lindt and sold under their
house mark have obtained an enviable reputation for quality. As Mr Tanner
explained in the witness box, the market for Lindt chocolates has grown and the
market has become international. As Lindt has grown, it has set up manufacturing
centres in Germany and France, and possibly elsewhere. The company has ensured
that all of its products, no matter where made, are to precisely the same composition
and quality as those made in Switzerland. However the result of this diversification is
that some Lindt chocolate is made in Switzerland while some is not. Cadbury says
that in a number of ways Lindt has deceived the public. The particulars cover alleged
activities not only in England *147 but also in Romania, Sweden and other places
abroad. Before me Cadbury rightly only relied on activities here. It says that Lindt (i)
has, at some point in the past, supplied point of sale stands on which the words
“Lindt Swiss chocolates” appear and that these had been used, in at least one shop,
to carry Lindt chocolate products not made in Switzerland, (ii) used the words “Lindt
of Switzerland” on other display stands on which non-Swiss chocolate was stacked
in shops, (iii) had used expressions such as “Lindt Excellence Milk Chocolate is
manufactured to a new recipe, specially created in Switzerland. … its subtle milky
flavour reflects the knowledge and experience of Lindt's Swiss master chocolate
makers”. There was little evidence as to the extent of these activities nor was it
suggested that Lindt had encouraged the first of them. This part of the case centered
on a detailed cross-examination of Mr Tanner concerning Lindt's labelling policies. It
was clear that Lindt ensure that they use the expression Swiss chocolate only on
products made in Switzerland. This is illustrated by the two wrappers reproduced in
Annex IV to this judgment. These are two versions of the Lindt Excellence product.
One is made in France. It is so marked on the back of the label. The other is made in
Switzerland. It is marked with the words “Swiss plain chocolate” on its front. This
policy is carried through, so I understand, to all Lindt products. In other words Lindt
does nothing to compromise the meaning of the words, Swiss chocolate. It is also
clear that they are proud of their Swiss origins and are willing to tell the public that
they are chocolatiers whose history goes back over a century and a half and that
their origins are in Switzerland. In my view there is nothing improper or deliberately
deceptive in this.
However Cadbury's major point was that the word Lindt was well known as the trade
mark of a Swiss chocolate maker and that the use of that mark on products which
did not come from Switzerland was therefore confusing. Cadbury's position was
made clear in the following question put to Mr Tanner:
“If you actually wanted to avoid confusion, you would use a different brand name,
would you not? Why use the same brand name for Swiss chocolate as you use for
non-Swiss chocolate?”
The evidence shows that some members of the public regard any product marked
“Lindt” to be Swiss chocolate. It follows that they may regard the French produced
Lindt Excellence bar to be Swiss. That is a result of the reputation that Lindt has built
up over the years and the fact that its Swiss connections are well known. But the fact
that some members of the public may have wrongly concluded that all Lindt
chocolate comes from Switzerland does not mean that it is unconscionable for Lindt
to sue to protect the designation Swiss chocolate. There is nothing improper in Lindt
not having adopted the course suggested to Mr Tanner that it should change its
trade mark for non-Swiss chocolate products. The defendant failed to show that Lindt
had embarked on a campaign of misleading the public. On the contrary, the overall
effect of the evidence of Mr Tanner, which I accept, was that Lindt has been and
continues to be anxious not to mislead any potential customer and to maintain the
integrity of the designation, Swiss chocolate.
I have come to the conclusion that it would not be unconscionable for Lindt to obtain
relief in this action.
*148
Suchard's activities
If anything, the allegations made against Suchard are even weaker than those made
against Lindt. The criticisms centered on two products; the well known Toblerone bar
and a milk chocolate bar sold under the name “Milka”. As far as the former is
concerned, it was originally made in Switzerland, manufacture was switched to
England in the 1970s and 1980s and was switched back to Switzerland at the end of
the 1980s. When made in Switzerland, the product bears upon it, sometimes in large
letters, the words “Swiss” or “Swiss chocolate”. When it was made in England, these
words were removed and an English address was put on the label. Once again it is
likely that during the period during which Toblerone was made in England, some
years before the commencement of these proceedings, some members of the public
assumed that it was still made in Switzerland. However Suchard's labelling policy,
like Lindt's, has always been consistent with ensuring that the words Swiss chocolate
retained their accurate geographical connection and maintain their reputation. There
was nothing improper or blameworthy in Suchard's behaviour in this respect.
Cadbury's case as far as Milka is concerned is weaker still. Milka is a product which
used to be made in Switzerland. For quite a long time now, the stocks of Milka
available to the English market have come from Suchard's factory in Germany. Milka
bars available in this country are sold in the packaging the front of which is
reproduced in Annex V. There is no reference to Switzerland or even to Suchard on
it. The rear of the packaging states in large letters that the product is made in
Germany. Notwithstanding that, it appears from the evidence that a small number of
members of the public may still think that Milka is made in Switzerland. It was
suggested that the use of a purple cow, pictures of snow-capped mountains and the
word “Alpine” added up to blameworthy actions by Suchard which were likely to
mislead the public into thinking this was Swiss chocolate. In my view it was nothing
of the sort. There is nothing in the Milka packaging which points obviously to
Switzerland rather than any other country with an Alpine area. Furthermore, even if,
contrary to my view, there is something underhand about it, any defects in this
packaging are far removed from the question of whether the designation, Swiss
chocolate, should be protected.
I have come to the conclusion that there is nothing which Suchard has done in
relation to its Milka product which could disentitle it to relief in these proceedings.
It follows that the defence of unclean hands does not succeed on this evidence.
However there is another matter which leads me to the same conclusion. The
defence of unclean hands amounts to a finding that the personal behaviour of the
plaintiff disentitles him to relief. I am not persuaded that any such defence would
have protected the defendant in this action even if the allegations in the defence had
been made out. Here the plaintiffs act for themselves and on behalf of all other
persons who manufacture chocolate in Switzerland and export it to the United
Kingdom. The representative nature of these proceedings has not been challenged.
All those other represented persons are as bound by the outcome of these
proceedings as if they had been present and taken part in the proceedings
themselves. Since the relief, and particularly the injunctive relief, is sought to protect
their common interest in the designation Swiss chocolate, it seems to me that the
defence of unclean hands could only succeed if had been proved that all *149 or
substantially all of the persons sharing that common interest have behaved
unconscionably. Mr Michael Bloch suggested that all the represented persons were
equally responsible for the alleged deceptive activities of Lindt and Suchard because
they were represented by Chocosuisse and it was the latter organisation's
responsibility on their behalves to ensure that Lindt and Suchard did not do anything
misleading.
This argument fails on the facts. Chocosuisse is not the representative of all those
represented in this action. Only 13 of 16 manufacturers are members of the
association. Furthermore it was not suggested that all the other represented parties
knew of all or any of Lindt's and Suchard's activities of which complaint is made. For
example it was not suggested that any other represented party did know or should
have known that Kennedys Garden Centre in Waddon Way, Purley Way, Croydon
had put non-Swiss Lindt chocolate on a display stand marked “Lindt Swiss
Chocolate”. There is no reasonable basis upon which any of them could have been
held responsible for any of the Lindt or Suchard activities complained of and, by the
same token, it could not be said that it would be unconscionable to grant them relief.
Locus of Chocosuisse to sue
The ability of Lindt and Suchard to sue in a representative capacity was not disputed.
However there was a formal challenge to Chocosuisse's right to sue. The position
adopted before me was that on the basis of Consorzio Del Prosciutto Di Parma v.
Marks & Spencer Plc [1991] R.P.C. 351 , (the Parma Ham case) Chocosuisse could
bring proceedings on its own behalf in passing off to prevent the reduction of its
membership which might be caused if the designation Swiss chocolate became
unprotectable in England. That authority also decides that a party in Chocosuisse's
position could not sue in a representative capacity. The plaintiffs were content to
accept Parma Ham for the purpose of the proceedings before me. However they
reserved the right to argue in a higher court that Chocosuisse did have the right to
sue in a representative capacity. Cadbury did not address any argument to me on
these points. In the circumstances I shall follow the approach adopted in Parma Ham
and find that Chocosuisse has the locus standi to sue on its own behalf only in these
proceedings.
For the reasons set out above, I find for the plaintiffs in this action.
Postscript:
The Annexes to this judgment consist of reproductions of the packaging of various
chocolate products. The limitations of colour printing means that these reproductions
are not always very true to the original. In particular Annex I does not accurately
reproduce the deep purple colour of the background behind the words “Swiss
Chalet”.
Note: due to further limitations of printing, black and white reproduction only is
possible in this report-Ed.
*150
APPENDIX
Cadbury's Swiss Chalet Packaging:
*151
Marks & Spencer Swiss Chocolate:
*152
Waitrose Swiss White Cholate:
*153
Lindt Excellance Packaging:
(a) Swiss made chocolate
(b) non-Swiss chocolate
*154
Suchard Milka Chocolate:
*155

1. In a witness statement which was the subject of a Civil Evidence Act Notice.

You might also like